hand writing a check

Despite check use being in decline over the last 30 years, instances of check fraud have actually been increasing.

Have you ever mailed a check, only to discover that it was cashed by someone other than the intended recipient?  You may have been the victim of check washing. This type of scam involves changing the payee name and the dollar amount on checks in order to fraudulently deposit them. Sometimes the scammer will make many blank copies of your check, making them payable to multiple payees and for various amounts – by the time you are aware of the issue, the damage may already be done.

Financial institutions have seen a significant increase in check fraud over the last several years. In fact, despite check use being in decline over the last 30 years, instances of check fraud have actually been increasing.

While it’s frightening to think about how easily this kind of fraud can happen, there are ways to avoid becoming a victim of check washing.

  • Deposit mail in collection boxes before last pickup of the day. This will ensure your mail is retrieved from the collection box by the Post Office before the end of the day, and it won’t be left overnight to potentially be fished out. Better yet, take it directly to the Post Office and drop it in a lobby collection box.
  • Retrieve your mail frequently. Never leave your mail in an accessible mailbox overnight.
  • Hold mail at the Post Office. If you are going on vacation or your business will be closed for a period of time, you can have your mail held at the Post Office until you return.

If you receive a check that you aren’t expecting, be wary – call the issuing bank to see if it is a legitimate item.  To avoid becoming an unwilling participant in a check fraud situation, keep these suggestions in mind:

  • Don’t accept a check for more than the selling price of an item.  Sometimes scammers will overpay you, then ask you to wire the difference back to them – Once these funds are sent, you cannot get them back, and the check will bounce, leaving you negative on the transaction.
  • Never use money from an unexpected check to send gift cards, money orders, or wire transfer to strangers or someone you just met.  Many scammers will pressure you to send money through money transfer services or buy gift cards and send them the PIN numbers.  Once you wire money or give out gift card PINs, it is like handing them cash – you will not get it back.
  • Disregard offers that ask you to pay taxes or fees in anticipation of a prize.  If it’s free, you shouldn’t have to pay for it!

First Bank Business customers can take advantage of Positive Pay, which is a service that matches incoming checks against a list of checks that were written on the account.  Similarly, ACH Positive Pay allows businesses to create payment rules for incoming ACH to prevent unauthorized transactions from occurring.

If you are looking for ways to protect your business from check fraud, please visit the Cash Management page of our website, or contact your local branch to be connected with a Cash Management specialist.